Cost accounting

profileJosh_95
Casestudy2.xlsx
Home>Business & Finance homework help>Accounting homework help>Cost accounting

Case Exhibit 1

Exhibit 1. Summary of the Contract With Mosesian Center for the Arts Black Box Theater
Service Fee Hours per show
Hall rental per week, including practices and performance $1,000
One-time ticket set-up fee $30
Technical support and lighting (4-hour minimum) $30 per hour 1.5 *
Sound techinician (4-hour minimum) $30 per hour 1.5 **
House management $60 per show
Facility fees $2 per ticket
Ticket convenience charges $3 per ticket
*SETU would have to pay a minimum of 4 hours ($120) even if SETU does not use 4 hours of technical support and lighting.
**SETU would have to pay minimum of 4 hours ($120) even if SETU does not use 4 hours of sound technician.

Case Exhibit 3

Exhibit 3. Assumptions for Estimating Ticket Sales and Receipts
Estimated number of shows 4
Price per ticket - adult $25 including $5 in fees
Price per ticket - student and senior $22 including $5 in fees
Estimated percentage of adult ticket 70%
Estimated percentage of student and senior ticket 30%
Maximum capacity 90 seats
Average occupancy per show 50%

Exhibit TN1

Color Scheme for Exhibit TN1
Data Entry
For cells in this color, find the numerical information in the case and enter the correct number.
Calculations
For cells in this color, calculate the answer based on information found in other colored cells.
Assumptions
Ticket sales assumptions
Estimated number of shows 4
Price per ticket - adult $25 includes $5 in fees
Price per ticket - student and senior $22 includes $5 in fees
Estimated percentage of adult ticket 70%
Estimated percentage of student and senior ticket 30%
Maximum capacity 90 seats
Average occupancy per show 50%
Variable costs assumptions
Facility fees $2 per ticket
Ticket convenience charges $3 per ticket
Step costs assumptions
Technical support and lighting (4-hour minimum) $30 per hour
Number of technical support hours per show 1.5
Sound technician (4-hour minimum) $30 per hour
Number of sound technician hours per show 1.5
House management $60 per show
Budgeted Statement Based on Four Shows
SETU (Stage Ensemble Theater Unit, Inc.)
Kamala at the Mosesian Center for the Arts Black Box Theater - March 31, April 1, and April 2, 2017
RECEIPTS Budget Actual EXPENDITURE Budget Actual
Total Variable Costs $ 900
Black Box Theater, including adults, students, and seniors $4,338
TOTAL ESTIMATED TICKET RECEIPTS $4,338 Total Contribution Margin $ 3,438
Cash donation $200 Step Costs: From Solution to Question 2b
In-kind food donation $300 Technical support and lighting (4-hour minimum) $180
Cash and In-Kind Food Donations Total $500 Sound technician (4-hour minimum) $180
TOTAL BUDGETED RECEIPTS $4,838 House management $240
Total Step Costs $ 600
Fixed Costs:
Hall rental per week, including practices and performance 1,000
One-time ticket set-up fee 30
Rental for rehearsal 300
Stage decoration and transportation of décor -
Additional light and sound 300
Brochures and printing 150
Publcity for various ads, interviews, Facebook ads, etc. 360
Make-up -
Food during performances and rehearsals 275
Copyright payment 200
Other 200
Total step and fixed costs $ 3,415
Operating Income Before Donations $ 23
NET OPERATING INCOME ESTIMATED $ 523

Solution 2a-b

Appendix TN2. Solutions for Questions 2a and 2b
Service From Case Exhibit 1
Fixed Costs assumptions
Hall rental per week, including practices and performance $1,000 Get information from Case Exhibit 1 (use formulas, do not retype amounts)
One-time ticket set-up fee $30
Get information from Case Exhibit 3 (use formulas, do not retype amounts)
Step costs assumptions hrs per show
Technical support and lighting (4-hour minimum) $30 per hour 1.5 * Use information on this sheet to prepare a formula to compute this amount
Sound techinician (4-hour minimum) $30 per hour 1.5 **
House management $60 per show Get information from the text of the case (you'll need to type these amounts)
Variable costs assumptions
Facility fees $2 per ticket
Ticket convenience charges $3 per ticket
Ticket sales assumptions From Case Exhibit 3
Estimated number of shows 4
Price per ticket - adult $25
Price per ticket - student and senior $22
Estimated percentage of adult ticket 70%
Estimated percentage of student and senior ticket 30%
Maximum capacity 90 seats
Average occupancy per show 50%
Budget Calculated based on information provided in Case Exhibits 1 and 3
Ticket sales - adult 126
Ticket sales - student and senior 54
Total number of tickets 180
Receipts
Ticket receipts - adult 3,150
Ticket receipts - student and senior 1,188
Total Receipts $4,338
Expenditures
Variable costs
Facility fees 360
Ticket convenience charges 540
Total Variable Costs $900
Contribution margin $3,438 Total Receipts - Total Variable Costs
Step costs
Technical support and lighting (4-hour minimum) 180 From Case Exhibit 1 ($30 per hour × 1.5 hours per show × 4 shows)
Sound technician (4-hour minimum) 180 Use the formula in the cell above to help you determine the formula for this cell
House management 240
Fixed costs From Case Descriptions
Hall rental per week, including practices and performance $1,000
One-time ticket set-up fee $30
Rental for rehearsal 300
Stage decoration and transportation of décor 0
Additional light and sound 300
Brochures and printing 150
Publcity for various ads, interviews, Facebook ads, etc. 360
Make-up 0
Food during performances and rehearsals 275
Copyright payment 200
Other 200
Total step and fixed costs $3,415
Operating Income Before Donations $23 Contribution Margin - Total Step and Fixed Costs
Cash and in-kind donation
Cash donation $200
Food in-kind donation $300
Total donations $500
Net operating income $523 Operating income before donations + Total donations
Calculate breakeven
Average price per ticket $24.10
Average variable cost per ticket $5.00
Average contribution margin $19.10
Number of tickets needed to break even 179
Ticket receipts needed to break even $4,314
Average number of tickets needed to break even per show 44.75
Break-even occupancy 50%

Solution 2c

Appendix TN2. Solution for Question 2c
Service From Case Exhibit 1
Fixed Costs assumptions
Hall rental per week, including practices and performance $1,000 Get information from Case Exhibit 1 (use formulas, do not retype amounts)
One-time ticket set-up fee $30
Get information from Case Exhibit 3 (use formulas, do not retype amounts)
Step costs assumptions hrs per show
Technical support and lighting (4-hour minimum) $30 per hour 1.5 * Use information on this sheet to prepare a formula to compute this amount
Sound techinician (4-hour minimum) $30 per hour 1.5 **
House management $60 per show Get information from the text of the case (you'll need to type these amounts)
Variable costs assumptions
Facility fees $2 per ticket
Ticket convenience charges $3 per ticket
Ticket sales assumptions From Case Exhibit 3
Estimated number of shows 3
Price per ticket - adult $25
Price per ticket - student and senior $22
Estimated percentage of adult ticket 70%
Estimated percentage of student and senior ticket 30%
Maximum capacity 90 seats
Average occupancy per show 50%
Budget Calculated based on information provided in Case Exhibits 1 and 3
Ticket sales - adult 95
Ticket sales - student and senior 41
Total number of tickets 135
Receipts
Ticket receipts - adult 2,362
Ticket receipts - student and senior 891
Total Receipts $3,254
Expenditures
Variable costs
Facility fees 270
Ticket convenience charges 405
Total Variable Costs $675
Contribution margin $2,579 Total Receipts - Total Variable Costs
Step costs
Technical support and lighting (4-hour minimum) 135 From Case Exhibit 1 ($30 per hour × 1.5 hours per show × 3 shows)
Sound technician (4-hour minimum) 135 Use the formula in the cell above to help you determine the formula for this cell
House management 180
Fixed costs From Case Descriptions
Hall rental per week, including practices and performance $1,000
One-time ticket set-up fee $30
Rental for rehearsal 300
Stage decoration and transportation of décor 0
Additional light and sound 300
Brochures and printing 150
Publcity for various ads, interviews, Facebook ads, etc. 360
Make-up 0
Food during performances and rehearsals 275
Copyright payment 200
Other 200
Total step and fixed costs $3,265
Operating Income Before Donations ($687) Contribution Margin - Total Step and Fixed Costs
Cash and in-kind donation
Cash donation $200
Food in-kind donation $300
Total donations $500
Net operating income ($187) Operating income before donations + Total donations
Calculate breakeven
Average price per ticket $24.10
Average variable cost per ticket $5.00
Average contribution margin $19.10
Number of tickets needed to break even 171
Ticket receipts needed to break even $4,121
Average number of tickets needed to break even per show 57.00
Break-even occupancy 63%

Solution 2d

Appendix TN2. Solution for Question 2d
Service From Case Exhibit 1
Fixed Costs assumptions
Hall rental per week, including practices and performance $1,000 Get information from Case Exhibit 1 (use formulas, do not retype amounts)
One-time ticket set-up fee $30
Get information from Case Exhibit 3 (use formulas, do not retype amounts)
Step costs assumptions hrs per show
Technical support and lighting (4-hour minimum) $30 per hour 1.5 * Use information on this sheet to prepare a formula to compute this amount
Sound techinician (4-hour minimum) $30 per hour 1.5 **
House management $60 per show Get information from the text of the case (you'll need to type these amounts)
Variable costs assumptions
Facility fees $2 per ticket
Ticket convenience charges $3 per ticket
Ticket sales assumptions From Case Exhibit 3
Estimated number of shows 4
Price per ticket - adult $25
Price per ticket - student and senior $22
Estimated percentage of adult ticket 70%
Estimated percentage of student and senior ticket 30%
Maximum capacity 90 seats
Average occupancy per show 50%
Budget Calculated based on information provided in Case Exhibits 1 and 3
Ticket sales - adult 126
Ticket sales - student and senior 54
Total number of tickets 180
Receipts
Ticket receipts - adult 3,150
Ticket receipts - student and senior 1,188
Total Receipts $4,338
Expenditures
Variable costs
Facility fees 360
Ticket convenience charges 540
Total Variable Costs $900
Contribution margin $3,438 Total Receipts - Total Variable Costs
Step costs
Technical support and lighting (4-hour minimum) 180 From Case Exhibit 1 ($30 per hour × 1.5 hours per show × 4 shows)
Sound technician (4-hour minimum) 180 Use the formula in the cell above to help you determine the formula for this cell
House management 240
Fixed costs From Case Descriptions
Hall rental per week, including practices and performance $1,000
One-time ticket set-up fee $30
Rental for rehearsal 300
Stage decoration and transportation of décor 0
Additional light and sound 300
Brochures and printing 150
Publcity for various ads, interviews, Facebook ads, etc. 360
Make-up 0
Food during performances and rehearsals 275
Copyright payment 200
Other 200
Total step and fixed costs $3,415
Operating Income Before Donations $23 Contribution Margin - Total Step and Fixed Costs
Cash and in-kind donation
Cash donation $200
Food in-kind donation $300
Total donations $500
Net operating income $523 Operating income before donations + Total donations
Calculate breakeven
Average price per ticket $24.10
Average variable cost per ticket $5.00
Average contribution margin $19.10
Number of tickets needed to break even 179
Ticket receipts needed to break even $4,314
Average number of tickets needed to break even per show 44.75
Break-even occupancy 50%

Solution 2e

Solutions 2f

Enter your explanation for Question 2f here. As you type the text lines will scroll upward.

Solutions 3a-3c

Appendix TN6. Solution to Question 3a
Contract costs with Black Box Theater
Fixed Costs assumptions
Hall rental per week, including practices and performance
One-time ticket set-up fee Get information from Case Exhibit 1 (use formulas, do not retype amounts)
Step costs Get information from Case Exhibit 3 (use formulas, do not retype amounts)
Technical support and lighting (4-hour minimum) per hour hour per show*
Sound techinician (4-hour minimum) per hour hour per show* Use information on this sheet to prepare a formula to compute this amount
House management per show
Get information from the text of the case (you'll need to type these amounts)
Variable costs
Facility fees per ticket
Ticket convenience charges per ticket
Hidden costs
Transporting stage décor furniture
Bookkeeping for production
Marketing on social media service
Graphic design for Kamala poster
Rental cost of furniture
Stage decoration service
Total Hidden Costs $0 <--3a solution
Appendix TN7. Solution to Question 3b
Estimated number of shows
Price per ticket - adult
Price per ticket - student and senior
Estimated percentage of adult ticket
Estimated percentage of student and senior ticket
Maximum capacity seats
Average occupancy per performance
Budget
Ticket sales - adult
Ticket sales - student and senior
Total number of tickets 0
Receipts
Ticket receipts - adult
Ticket receipts - student and senior
Total Receipts $0
Expenditures
Variable costs
Facility fees
Ticket convenience charges
Total Variable Costs $0
Contribution margin $0
Step costs
Technical support and lighting (4-hour minimum)
Sound techinicial (4-hour minimum)
House management
Fixed costs
Hall rental per week, including practices and performance
One-time ticket set-up fee
Rental for rehearsal
Stage decoration and transportation of décor
Additional light and sound
Brochures and printing
Publcity for various ads, interviews, Facebook ads, etc.
Make-up
Food during performances and rehearsals
Copyright payment
Other
Hidden Costs
Total step and fixed costs $0
Operating Income Before Donations $0
Cash and in-kind donation
cash donation
Food in-kind donation
Total donations $0
Net operating income $0
Appendix TN8. Solution to Question 3c
Number of shows
Calculate breakeven without donation 4 3
Average price per ticket
Average variable cost per ticket
Average contribution margin
Number of tickets needed to break even
Ticket receipts needed to break even
Average number of tickets needed to break even per show
Break-even occupancy
Calculate breakeven with donation
Number of tickets needed to break even
Ticket receipts needed to break even
Average number of tickets needed to break even per show
Break-even occupancy